Arena deal crumbles, Sacramento's NBA future shaky

By the Associated Press | April 14, 2012 | 2:37 AM EDT

NBA Commissioner David Stern answers a question at a news conference after the NBA Board of Governors meetings, in New York, Friday, April 13, 2012. Tom Benson brought stability to the Saints nearly three decades ago and now plans to do the same for the Hornets in small-market New Orleans. The Saints' owner agreed Friday to purchase the Hornets from the NBA. (AP Photo/Richard Drew)

NEW YORK (AP) — The Kings' future in Sacramento is uncertain again.

A tentative deal for a new arena has fallen apart, leaving open the possibility the team's owners could again try to move from California's capital.

The Maloof family has balked at terms of the agreement reached last month, and though they say they want to remain in Sacramento, Johnson isn't so sure after meeting with them Friday and hearing their list of concerns he said hadn't previously been disclosed.

"It just feels like they were coming up with reasons of why not to do the deal," Johnson said.

So a year after Johnson came to New York to begin his fight to save the team, his city is in jeopardy of losing it all over again.

Admitting he was angry and questioning the Maloofs' trustworthiness, Johnson praised his city's efforts but said he doesn't know what will happen now.

"They are now saying they don't want to do the deal, which essentially means they don't want to be in Sacramento, and that's very, very disappointing," he said.

The Kings say otherwise.

"We are committed to remaining the Sacramento Kings," the team said in a statement.

But they stressed — as did Commissioner David Stern — that the deal was "always nonbinding," and the Maloofs always had the right to decide they were no longer comfortable with the terms.

"The negotiations that have occurred surrounding, as Commissioner Stern said repeatedly today during his news conference, a 'non-binding framework,' never resulted in a deal that was good for the City or good for the team," the Kings said.

It was a stunningly swift and disappointing result for Sacramento officials who thought they were on their way to holding onto the team just weeks ago.

They had met with the Maloofs and league officials during the NBA's All-Star weekend in Orlando in February, celebrating a tentative deal to fund the estimated $391 million arena that would open for the 2015-16 season in the downtown Sacramento rail yards.

Co-owner Gavin Maloof was in tears then in a joint announcement of the deal, which the Sacramento City Council passed its end of in early March. The deal was brokered by the league — with the Maloofs' permission, according to Johnson — and tentatively agreed to by the Kings.

But Joe, Gavin and George Maloof had since taken issue with some of the terms — particularly environmental and pre-development costs that Johnson said made up less than 1 percent of the project's cost. Under the agreement, the Kings and arena operator AEG each agreed to pay about $3.25 million in pre-development costs with the city paying the remaining $6.5 million.

"I think it's fair for the Maloofs to say they don't want to do that," Stern said during a news conference after two days of owners meetings. "If they had done it simpler, earlier or more directly, it could have saved a lot of angst and trouble."

The Maloofs made a presentation to owners Thursday, which they shared at a separate news conference Friday. They then met with Johnson for about two hours, a meeting Johnson called "relatively civil" but ultimately pointless — and throws open further questions about the Maloofs' financial capabilities.

"It just became clear that they're not willing to honor what we laid out," Johnson said.

During their news conference, the Maloofs said they liked Sacramento but insisted the arena project was too expensive. George Maloof said they had given the city a list of their concerns that needed to be addressed before they could commit to such a major deal.

Maloof even floated the idea of renovating Power Balance Pavilion. Stern said he didn't know if that was possible, but Johnson strongly said he wouldn't support the plan and that if the Maloofs wanted to do it, it would come without financial support from the city.

"Regardless of where you stand on the arena the facts are clear: The city stepped up and the Maloofs did not," state Senator Darrell Steinberg said in a statement. "Sacramento deserves partners who will live by their word. I stand with the Mayor and the city to do everything possible to protect Sacramento's interest. I hope the NBA and its owners do not allow this kind of bad behavior to occur without consequences. I look forward to meeting with Mayor Johnson and city officials to consider next steps."

The Kings appeared set to move to Anaheim after last season, but Johnson flew to New York the day after the season ended and convinced owners to give the city one last shot. Johnson said the city had since reached "every benchmark, every milestone" in showing it could raise the necessary costs.

The NBA tried to make it work. Stern said the league advanced a $67 million loan from its league credit facility and he then authorized a further contribution of $7 million on top of that. He said the league was perhaps "over-optimistic."

"I am extremely disappointed on behalf of both the Maloofs and the city of Sacramento, but I think that there's nothing further to be done and this is a situation that the Maloofs will have to make judgments on and the city will have to make judgments on, because I think we have done as much as we can do," Stern said.

Stern largely defended the Maloofs, though he took issue with assertions about the plan's viability made by an economist during their press conference, calling his role "ill grace."

Johnson has said Sacramento would be interested in keeping the Kings under another owner, but the Maloofs have repeatedly said they aren't interested in selling, even as they have faced financial difficulties that left the family with only 2 percent of their ownership of the Palms Casino in Las Vegas.

The Kings are scheduled to play at Power Balance Pavilion next season. Stern wouldn't speculate where they would play beyond that, and said if they sought to relocate, approval would be left to the relocation committee headed by Oklahoma City owner Clay Bennett. Kings coach Keith Smart said they won't worry about that.

"You know what they say: As a coach and a player in this business, nothing is done until the paperwork is all signed. Nothing is done until all that is there," he said before a game in Oklahoma City. "Right now, a lot of talk and a lot of different things going forward, but our focus is still on the game itself. We can't control that. It's in the right hands of people who are going to try to make the right decision from there. We'll be ready to play, keep this team functioning and prepared to play every game."

Anaheim is still very interested in luring a team to the city-owned Honda Center with the backing of Henry Samueli, the billionaire technology executive who owns the NHL's Anaheim Ducks. Samueli recently embarked on a $20 million improvement project, adding several amenities to the well-maintained arena by early 2013.

"Like most NBA fans, I've been watching the recent developments with the Kings, and if they do leave Sacramento, they should know that we would welcome them here," Tait said. "Anaheim is NBA-ready. We have great fans and a first-class facility."

During Anaheim's previous flirtation with the Kings, Samueli agreed to loan $50 million to the Maloofs for relocation expenses. The Kings also seem likely to make much more money in television and corporate sponsorship in Orange County than in Sacramento, particularly with the television opening created when the Lakers move next season from Fox Sports West to Time Warner.

If the Kings attempt to move to Orange County, the Lakers and Clippers likely would voice objections to a third team invading their geographic territory. Honda Center is 35 miles away from Staples Center, but Orange County residents insist they are in a distinct area of Southern California.

"With more than 3 million people in Orange County and millions more in the Inland Empire, we have the fan base and the enthusiasm to certainly support a team," Tait said.